"Today, we took another step forward and announced the largest power battery production investment project in Illinois to date. I am very pleased to welcome Guoxuan Hi-Tech, the world's leading battery manufacturer, to Illinois..." said J.B. Pritzker, Governor of Illinois, USA. At this point, the location of Guoxuan Hi-Tech’s U.S. battery factory has finally surfaced.



Screenshot from the official website of the Illinois State Government

On September 8, local time, the official website of the Illinois State Government in the United States released news announcing T AGPH12Guoxuan Hi-Tech (SZ002074, stock price 23.8 yuan, market value 42.337 billion yuan) will spend US$2 billion (approximately 14.7 billion yuan) to build a new electric vehicle battery super factory in Manteno, Kankakee County, the state. The factory is expected to produce 10GWh of lithium-ion battery packs and 40GWh of lithium-ion battery cells, and is scheduled to be put into production next year.

According to reports, the governor of Illinois said that Guoxuan Hi-Tech’s Gigafactory will create 2,600 high-paying jobs and is the state’s “most important new manufacturing investment in decades.” The factory will focus on lithium-ion battery cells, battery pack production and energy storage systems, and will receive US$536 million (approximately 4 billion yuan) incentives from the state.

On September 9, Guoxuan High-tech confirmed to the "Daily Economic News" reporter that on September 8, Guoxuan High-tech's wholly-owned subsidiary GotionInc announced in Illinois, USA, that the company will build a battery factory with an annual output of 40GWh in Manteno Town, Kankakee County, Illinois.

14.7 billion investment + nearly 4 billion subsidies

According to the Illinois Governor’s Office released on September 8 According to a press release, Illinois Governor J.B. Pritzker and Guoxuan Hi-Tech Chairman Li Zhen and others jointly announced on September 8, local time, that Guoxuan Hi-Tech will build a new lithium battery super factory with an investment of US$2 billion (approximately 14.7 billion yuan) in Manteno, Kankakee County, the state.


According to the plan, the Guoxuan Illinois factory will focus on lithium-ion battery cells, battery pack production and energy storage system integration. After completion, will have an annual Pack production capacity of 10GWh and 40GWh annual cell production capacity. The factory will be completed in two phases based on an existing local factory. is expected to cover an area of ​​approximately 150 acres (approximately 910 acres). After the first phase of the factory renovation is completed, it is expected to be put into production in 2024. The establishment of this factory will help enhance the company’s supply capabilities to existing and potential partners in North America and meet the growing battery demand in the electric vehicle industry.

The battery factory project has also become the largest electric vehicle battery investment in Illinois history.

Illinois Governor J.B. Pritzker and local officials attended the project groundbreaking ceremony and praised the project as an important step in developing the electric vehicle ecosystem and supply chain in Illinois.

“2,600 new jobs, a $2 billion Gigafactory, and the most significant new manufacturing investment in Illinois in decades are the latest proof that we are in a new phase. Illinois is rising and we remain open to business investment,” Pritzker said.

Lieutenant Governor Juliana Stratton said, “This new facility will transform our state’s economic landscape, create new jobs and demonstrate our continued commitment to making Illinois a great state. "

Li Zhen, chairman of Guoxuan High-tech, said that after one year, Guoxuan High-tech finally settled in Illinois to build a battery factory. "Guoxuan settled in Illinois. We did not break ground to build a new factory, but renovated an old factory to restore its past glory. This is our cherishment and respect for resources. We firmly believe that Guoxuan's battery manufacturing technology will definitely contribute to the electrification of automobiles in North America and China. Midea’s economic and trade exchanges add strength.”

According to Pritzker, Guoxuan Hi-Tech will also receive financial subsidies of up to 536 million US dollars (approximately 4 billion yuan) in the future. The subsidy funds will come from Illinois’ REV incentive program (Reimagining Energy and Vehicles, Reimagining Energy and Vehicles Program) and a fund called “Invest in Illinois.” Among them, through the REV incentive plan, Guoxuan Hi-Tech will receive US$125 million ((approximately 900 million yuan)) in funding.

In addition, Guoxuan Hi-Tech is also eligible to receive tax benefits of US$213 million (approximately 1.5 billion yuan) over the next 30 years. The requirements are that Guoxuan High-tech’s minimum investment is US$1.9 billion and the creation of 2,600 full-time jobs, and the job salary must not be less than 120% of the average salary of similar positions in Kankakee County.

In addition, according to reports, Illinois is focusing on the construction of integrated electric vehicle The vehicle center's goal will also be to fund a new nearby manufacturing training academy to train skilled battery production workers locally and to support local industry development.

According to The Paper, the battery factory project in Illinois is Guoxuan Hi-Tech’s second major investment in the United States after announcing in October last year that it would invest US$2.4 billion to build a battery materials factory in northern Michigan. The Michigan battery materials plant includes a plant that produces 150,000 tons of battery cathode materials per year, and two plants that produce 50,000 tons of battery anode materials annually. In June this year, the factory received approval from the U.S. federal government.

In the view of the industry, Guoxuan Hi-Tech’s investment in Illinois will, on the one hand, accelerate the implementation of lithium iron phosphate battery technology in the United States, help further reduce costs for American electric vehicles that currently mainly use nickel-cobalt-manganese ternary lithium batteries from Japanese and Korean battery companies, thereby accelerating the cultivation of the new energy vehicle market in the United States.

On the other hand, localized production in the United States will undoubtedly help Guoxuan Hi-Tech expand its customer base for overseas automobile companies, especially in the United States. At present, Guoxuan Hi-tech's domestic customers are Great Wall, JAC, Changan, Geely, BAIC New Energy, and Chery. It is the largest battery supplier to JAC and Chery, and was shortlisted for the battery supplier business circle of GAC Aion this year.

The largest shareholder of Guoxuan Hi-TechFor Volkswagen ChinaT AGPH9

According to a previous report by the Securities Times, when seeking to verify the above-mentioned Guoxuan Hi-Techfactory construction in the United States, the reporter contacted two people from power battery and main engine manufacturers. Industry insiders all said, "There is a high probability that Guoxuan Hi-Tech has a public background, which is different from many Chinese battery manufacturers."

TAGP H19The editor checked the information and found that Guoxuan Hi-Tech was established in 2006, was listed in May 2015, and its Chinese headquarters is located in Baohe District, Hefei City, Anhui Province. CurrentlyGuoxuan Hi-TechThe largest shareholder is Volkswagen China, its main business includes power batteries and energy storage batteries.

Guoxuan Hi-Tech has eight major R&D centers in the world, respectively in Hefei, China, Shanghai, China, Silicon Valley, USA, Cleveland, USA, Göttingen, Germany, Tsukuba, Japan, Pune, India, and Nanyang Technological Technology, Singapore Universities and other places; there are top ten battery production bases, namely in Hefei (Xinzhan, Jingkai, Lujiang), Nanjing, Nantong, Qingdao, Tangshan, Liuzhou, Tongcheng, Yichun and other places. The company has also deployed overseas production bases in Germany, India, Vietnam, the United States and other countries.

According to the latest data from global information agency SNEresearch, From January to July this year, Guoxuan Hi-Tech’s global installed capacity of power batteries was 7.8GWH, a year-on-year increase of 10%, with a market share of 9.3%, ranking ninth in the world.


Image source: Qichacha

Guoxuan High-Tech has also been working hard on internationalization and "expanding energy storage" strategies in recent years. On the evening of August 29, Guoxuan High-tech released its 2023 semi-annual report, which showed that the company’s revenue was 15.239 billion yuan, a year-on-year increase of 76.42%; The net profit attributable to the parent company was 209 million yuan, a year-on-year increase of 223.75%.

In the first half of 2023, Guoxuan Hi-Tech’s energy storage business revenue reached 4.147 billion yuan, a year-on-year increase of 224.33%, accounting for 27.21% of revenue.

At the same time, Guoxuan Hi-Tech’s overseas business revenue in the first half of 2023 was 3.062 billion yuan, a year-on-year increase of 296.74%, and its proportion of total revenue increased to 20.09%. Technical advantages and product series reserves are the two major pivots for Guoxuan Hi-Tech to build the core competitiveness of its overseas business.


Guoxuan Hi-Tech subsidiary Guoxuan’s headquarters in California, USA Picture source: Gotio nOfficial website

In addition, compared with the first half of 2022, Guoxuan Hi-Tech's gross profit margin has improved in the first half of 2023. In terms of business, the company's gross profit margin of power lithium battery business increased from 12.49% to 13.22%; gross profit margin of energy storage battery business increased from 10.24% to 17.43%.

The lithium battery industry has become a trend to go overseas

According to Jiemian News, in April this year, Guoxuan Hi-Tech revealed at a media open day event that the company had conducted in-depth research on building a factory in the United States. The progress is now relatively smooth and the specific site selection is about to be determined. Guoxuan Hi-Tech plans to build two factories in the United States, a battery factory and a battery materials factory. The Manteno factory announced this time is one of the battery factories, and the news that the battery materials factory will be located in Michigan came out in October last year.

Chen Ruilin, the company’s vice president of international business, said at the time that due to the impact of the U.S. “Inflation Reduction Act” , it was imperative for Guoxuan Hi-Tech to build a local factory.

The Inflation Reduction Act, which took effect at the beginning of this year, provides a $7,500 federal tax credit for electric vehicles assembled in North America, but has strict standards for the sources of critical minerals, components, etc. in car batteries.

Starting in 2023, Electric vehicles must have Battery components and materials with more than 50% manufactured or assembled in North America are eligible for a tax credit of $3,750 per vehicle . This ratio needs to reach 100% after 2029. Another $3,750 in tax incentives are related to critical battery minerals. Starting in 2023, electric vehicles will be required to have 40% of critical battery minerals mined or recycled in North America or countries with a trade agreement with the United States. The proportion of localized raw materials will grow at an annual rate of 10%, reaching 80% by 2027.

For Chinese battery companies, setting up factories in the United States can meet the above requirements. At the same time, they can also obtain tax incentives and financial support from the U.S. government and local governments.

On September 6, Yiwei Lithium Energy announced that its wholly-owned subsidiary Yiwei America has established a joint venture with Electrified Power, Daimler Truck, and PACCAR to invest in building battery production capacity in the United States. Among them, Yiwei America intends to contribute no more than US$150 million in cash and hold 10% of the equity of the joint venture. The batteries produced by the joint venture are mainly used in designated North American commercial vehicle fields.

According to the Securities Times, according to the power battery industry insiders interviewed by the reporter, the continued overseas expansion of leading battery companies is not only a benchmark for the battery capabilities of these companies, but also an important manifestation of the implementation of globalization strategies.

When Yiwei Lithium went to the United States to jointly build battery production capacity, it was clear that it would focus on producing batteries with both cost and quality advantages, and continue to consolidate and enhance the company's competitiveness and internationalization level. This is an important measure for the company to improve its global industrial layout.

This overseas expansion is also reflected in other aspects. For example, in early September, EV Lithium Energy also announced that it had signed a memorandum of understanding with RiMac, a Croatian automotive technology solutions provider, and obtained the latter's power battery designation. It is expected to expand cooperation intentions to other projects in the future; on the same day, it also announced again that it had obtained the designation of General Motors' 12V lithium battery system. These can be regarded as important measures for the company to improve its global industrial layout.

In addition, it can be found from the semi-annual reports of various power battery companies that energy storage and going overseas are new fulcrums for their business growth.

Data from the Ministry of Industry and Information Technology show that in the first half of this year, my country’s lithium battery product exports increased by 69% year-on-year, with power batteries being the mainstay. Judging from the performance of each company, CATL’s overseas revenue in the first half of this year was 65.684 billion yuan, a year-on-year increase of more than 1.9 times, accounting for 35.49% of total operating revenue. The overseas business revenue of Guoxuan Hi-Tech and China New Aviation increased by 296.74% and 115.7% year-on-year; Funeng Technology's overseas customers accounted for approximately 70%, and Yiwei Lithium Energy's overseas sales accounted for approximately 40%.

At the same time, in the first half of this year, CATL, Honeycomb Energy, Guoxuan Hi-Tech, Yiwei Lithium Energy, Sunwanda, etc. announced overseas investment plans. According to Beijing News Shell Finance, Wang Wei, chairman of Xinwangda, said that going overseas can get closer to customers through localized production and seize opportunities for rapid industrial development; considering the penetration rate of European automobiles, if the combustion ban is put on the agenda, its huge demand gap will inevitably be transformed into huge development opportunities for upstream and downstream enterprises in the domestic new energy industry chain. But at the same time, he also said that European and American policies such as the "Inflation Reduction Act" and "EU Battery and Waste Battery Regulations" have had a negative impact on Chinese power battery companies' development of overseas markets.

According to the Securities Times, Why are so many battery companies rushing to the United States? The core reason is that Chinese companies “going global” need to strive to enter the markets of developed countries, and North America, as a mature commercial market, has always been a must-have for Chinese companies going overseas. In particular, the U.S. new energy vehicle market is regarded by the industry as the most promising incremental market in the future. According to data, from January to May this year, the global share of the US new energy vehicle market was 12%, and the global share of the US pure electric vehicle market rose to 13%.